When Durham’s NC Mutual Life Insurance Company was established in 1898, it happened during the height of white supremacist campaigns of terror across the state that led to a racial massacre and overthrow of a duly elected, multiracial government in Wilmington that same year.
During its heyday, the insurance company was the economic engine that generated the rise of a solid middle- and upper middle-class in the Bull City, and went on to become the largest Black-owned business in the world.
Established by business leaders John Merrick, A.M. Moore, and Charles “CC” Spaulding, the work of the triumvirate remains unparalleled. In their quest to create a proud economic self-sufficiency in the face of Jim Crow, the founders created a prosperous Hayti District. NC Mutual was the flagship economic operation that garnered the community accolades as the “Black Wall Street.”
Indeed, for nearly 20 years, between 1968, when it first opened its doors at 411 W. Chapel Hill Street, until 1987, the 14-story skyscraper was the tallest building along Durham’s then porous skyline.
Last week, Mike Causey, the state’s insurance Commissioner announced that a Wake County Superior Court judge declared NC Mutual insolvent and approved a petition to liquidate the once-venerable insurance institution.
NC Mutual’s last day of operations is October 31, according to a department of insurance press release made public late last week.
The release notes that the company was founded as the North Carolina Mutual and Provident Association, and at one point conducted business in 48 states, the District of Columbia, and has nearly a quarter-million policyholders.
Things went horribly left for NC Mutual in 2016 after a former investment manager was indicted for participating in a scheme that bilked the insurance company out of more than $34 million, federal department of justice officials announced in 2020 after the indictment was unsealed.
Federal prosecutors say Bradley Reifler of Milbrook, New York was an investment advisor over the $34 million when they charged him with four counts of wire fraud and one count of perjury.
On December 3, 2018, NC Mutual was placed into rehabilitation and a moratorium on surrenders and loans became effective.
“Causey and his staff believe that it is reasonable to work towards the development of a Plan of Rehabilitation for NC Mutual with the goal of returning NC Mutual to a condition where all contractual claims of policyholders can be honored, state insurance officials stated in the 2018 release.
But if part of the rehabilitation goal was to keep the doors open, NC Mutual never recovered from the financial blow it endured after it was defrauded out of tens of millions of dollars.
“I have tremendous respect for the role NC Mutual played in providing insurance products to North Carolina citizens for over 100 years,” Causey said following the court’s order. “However, my number one priority as insurance commissioner is protecting policyholders. The court’s order of liquidation helps to further that priority by ensuring that the policyholder claims continue to be paid.”
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